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Dangal for More Money: Intl, Domestic Cricketers’ Salaries Decoded

Background

The BCCI is the sun around which spins world cricket's ecosystem. With India's economy ticking nicely at 7% or so, and staunch support of a huge and passionate fan base, Indian cricket generates massive wealth which gives it clout and stature.

Still, even in this 'all is well' scenario some troubling questions arise: Are Indian cricketers receiving a fair share of the money? Are they paid enough? How do their salaries compare with colleagues in other countries?

We decode the system and the structure -- and look critically at the numbers .

Context

India has approximately 1000 first-class players representing 28 teams in different formats of senior BCCI tournament each year. Of these, only a handful of top players are centrally contracted by the BCCI and given annual, graded retainership amounts. In contrast to this job security for the select few, the majority pretty much are left to fend for themselves as jobs have dried up both in government and the corporate sector.

Implication of this ground reality change: With no jobs and no other source of earning, first class cricketers experience severe financial worry and insecurity. They are almost entirely dependent financially on match fees earnings and the BCCI has, therefore, indirectly become their employer.

Also, adding to their plight is the fact that there is no certainty about income as players get paid only if selected to play. Which effectively reduces them to the status of daily wage earners- paid only for days they get work!

Even this match fee system for domestic players is astonishingly unfair. The BCCI pays players under the Gross Revenue Share (GRS) arrangement which was started in 2004 by BCCI President Jagmohan Dalmiya after prolonged discussions with senior players led by Anil Kumble and Rahul Dravid.The deal is that 26% of BCCI's annual revenue is split 3 ways - 13% to international players, 10.6 to domestic players and the rest to women and juniors.

There was no specific reason for capping player share at 26%, except that Australia shared 25% with its players and Mr Dalmiya wanted to be one better.

(Photo: RhythumSeth/TheQuint)

Why The GRS Formula is Fundamentally Flawed

The 26% of BCCI’s revenue that is distributed among Indian cricketers is an arbitrary figure artificially constructed because BCCI excludes 70 % media revenue (Rs 280 crores media surplus expected this year) and IPL revenue (Rs 366 crores surplus) from the base pool. With these major exclusions the BCCI cleverly controls the total revenue pool to share a smaller amount with players!

The 26% player share is also notional because in the event of annual revenue going down, the BCCI makes a 'top up' contribution to maintain the earlier level of payments(this year an additional Rs 46 crores is budgeted by BCCI to maintain the payment level of last season)

Uncertainty and delays: Under the present arrangement, domestic first class players receive Rs 10,000 per day of Ranji, this is part payment of match fees with a promise that the other part will be disbursed in the future once there is clarity about BCCI annual total revenue. As the GRS is known only end of the season there is uncertainty about match payments.

GRS Formula, Unfair to Most

The revenue distribution is badly skewed in favour of the international centrally contracted players who get 50% revenue whereas the 900 -1000 domestic senior players receive only 30% .

The total amount paid to ALL domestic players in one year is perhaps less than BCCI's earnings/revenue from a single international T20 game. Under the STAR media deal alone BCCI gets Rs 43 crores from every international match.

(Photo: RhythumSeth/TheQuint)

Way Forward for International Players

For centrally contracted player, the board’s annual contract offering should be made realistic.

At present, centrally contracted players are slotted into 3 categories: Grade A get Rs 2 crore a year, Grade B get Rs 1 crore a year and Grade C get Rs 50 lakh. In addition, players receive match fees, for instance 15 lakhs for tests.

There is no clear criteria for grading players done by President and Secretary BCCI in consultation with the Chairman, Selection Committee.

Another issue is the value of the annual retainer contract because there is no basis for the latest Rs 2 crore compensation or the one crore earlier. Both figures are intuitive, arbitrary and whimsical.

Other countries decide player payments in a more structured, scientific manner. Players' performance is assessed in all 3 formats and points are allocated based on their contributions to arrive at overall 'value to the team'. England, from this year, has introduced separate test and T20 contracts(red and white ball contracts )for its players.

Compared to India, Australia and England cricketers are paid more handsomely.

Domestic Players Road Ahead

For them the complicated GRS (with its million flaws and zero benefits) does not work-- it should be scrapped forthwith and substituted with one of these two options :

1) Central annual contracts for Ranji players:

Similar to the practise in England, Australia and South Africa state associations should contract their players.

In India, the suggested 3 grades could be Rs 7.5/12.5/20 lakhs with 5 players each in the top two categories and the remaining 10 in the lower grade. The annual financial outflow thus capped under Rs 3 crores is hardly a burden considering each state unit receives an no question asked BCCI gift cheque every year in the form of 'subsidies' of close to 30 crores.

2) Revised, increased, fixed match fees:

A simpler option,though less meritorious,is to fix attractive match fees for first class games to be paid upfront. Match fee of Rs 2 lakhs per Ranji game,for instance,would give a regular,successful,player an annual income in the Rs 20 lakh range.

The BCCI has fixed salaries/allowances for match referees, selectors, umpires, video analysts scorers, curators so why not for players?

(Photo: RhythumSeth/TheQuint)

Benefits/Advantages of These Options

For BCCI:

1) With GRS junked,the financial arrangement between players and BCCI would be clean and transparent leaving no scope or need for arbitrary engineering to exclude revenue from the pool to be shared.

2) BCCI will have a clear idea about its annual outflow/commitment, the exact resources it needs to set aside each year for player payments.

3) Improved financial reward for 900-1000 domestic first class players would be seen as a significant welfare measure. This, in itself, has great PR value for the BCCI which will be seen as a progressive organisation committed to supporting its most important stakeholders.

For Players:

1) Financial security is important,it removes worry/stress about their future.With clarity about income,players are free to focus fully on the game.

2) With timely payments and fixed income,unnecessary suspense and delays are removed.

3) With better rewards, domestic Ranji players feel they are respected and their contribution recognised.

Financial Impact of IPL on Domestic Players

Contrary to common understanding,the IPL has not made a significant impact on the financial fortunes of domestic cricketers .

The facts are as follows :

Currently 135 Indian players are contracted in the IPL. Of these 135, approx 50 are international players who are adequately compensated by the BCCI through central contracts, match fees, share from GRS. Also theses stars are ones likely to have income opportunities outside cricket.

Of the remaining domestic 85 players, 48 were contracted by IPL teams at the base price: Rs 10 lakhs (note: some of these 48 are now receiving higher amounts) and just 14 are in the 10-30 lakh range.

This means that real, substantial benefits (contracts upwards of 30 lakhs ) have gone only to a very small group -- maybe just around 25 players!

(Photo: Liju Joseph/TheQuint)

Conclusion

IPL’s financial upside has bypassed the average domestic player while enriching the BCCI. The business model of the IPL is a masterpiece of simplicity combined with effectiveness. The financial construct of the IPL is such that the BCCI, the promoter/owner of the league, assures itself a large profit by securing franchise fees(from team owners) selling television rights(to Sony) and central sponsorships(to Vivo, Vodafone etc) and transferring all business risk to participating teams.

(Amrit Mathur is a senior journalist, former GM of the BCCI and Manager of the Indian Cricket Team. He can be reached at@AmritMathur1)

The views expressed here are those of the author’s and do not necessarily represent the views of BloombergQuint or its editorial team.